Here's how this startup is helping cities better manage traffic and parking

When you come across a stop sign, signal light or painted curb, what do you see?

Lacuna Technologies Inc. CEO Hugh Martin sees a low-tech way of addressing the complex problem of managing transportation in cities.

Martin says it's time for cities' transportation systems to incorporate twenty-first century technology, such as advanced software and services. Many new-age transportation companies, including Uber Technologies Inc. and Bird Rides Inc., already use such digital tools to guide their operations.

"They've built an entire system that is a digital version of the city and they run a business on it," Martin said. "Cities have been disenfranchised because they don't know anything that's going on in that digital world."

Lacuna aims to help municipalities solve that problem. The Palo Alto-based startup designed a service to help municipalities take better control of their transportation systems and to optimize the revenue they get from them.

The company's service taps into the data collected by transportation companies about the location and status of their vehicles and allows local governments to set policies for such providers. For example, if a city wanted to limit the number of cars driving down a particular residential street, it could set a rule through Lacuna's service that would instruct vehicles that were on the network to use a different route.

Lacuna's software can also help a city like San Jose, for example, charge different amounts for curbside parking to freight delivery, restaurant delivery, and regular passenger vehicles.

Cities "can establish different pricing to make sure that they encourage the right kind of behavior," Martin said. "They're effectively monetizing the curb while providing optimized outcomes that they're looking for."

Lacuna has some big customers

Finding new revenue streams is especially important for municipalities. As people buy and drive increasing numbers of electric vehicles, federal and state governments are expected to collect less gas tax revenue, which they often use to fund transportation projects in cities.

Lacuna stands to benefit from such revenue efforts alongside its government customers, which thus far include the cities of Los Angeles, San Jose and Seattle; Miami-Dade County; and Los Angeles World Airports at LAX. The company charges a percentage fee based on the revenue its customers collect. It also charges governments a consulting fee when it sets up its applications for them.

Founded in 2018, Lacuna has raised $46 million from investors including Playground Global, Xplorer Capital and JetBlue Technology Ventures, according to PitchBook Data. In September, the startup won funding from CitiGroup Inc.'s Impact Fund, which invests in companies that are trying to solve big societal problems.

Lacuna built its service around the Mobility Data Specification, an open source system that allows municipalities and companies to securely share data. Because MDS has been widely adopted by cities around the nation, the startup can easily take what works in one city and apply it to another, Martin said. By contrast, other companies might have tried to build such software themselves and sell it to each individual city, he said.

"We recognized early on that is not the way to build and scale a large company, nor is it a way to get solutions that are standardized around the world," Martin said. "Doing business in this way is a brand new idea."